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EPN346 - Opting out process and revision of the Employers’ Pension Guide for automatic enrolment

Audience: This Notice will be of particular interest to:

  • HR Managers and HR Policy advisers

Action

  • To note instructions about the opting out process and illustrative flowcharts now in Annex 5D of the Employers’ Pension Guide
  • To note amendments to the Employers’ Pension Guide to incorporate further information about automatic enrolment

Timing: Immediate

Background

  1. EPN323 drew employers’ attention to their forthcoming legal requirement to automatically enrol all eligible jobholders into a pension scheme and EPN343 provided further information about the impact of the legislation on policy and procedures. This EPN outlines necessary revisions that have been made to the opting out process to fulfil automatic enrolment requirements and explains which sections of the Employers’ Pension Guide have now been updated to incorporate guidance on changes to policy and procedures to implement automatic enrolment.
  2. Opting out process
    EPN343 explained that the opting out process had been revised and that a new opting out process had been put in place for which the employer was responsible for managing and monitoring.
  3. The Opt Out forms have been amended in light of further policy input:
  4. The opting out factsheet has been combined with the form so that members wishing to opt out fully understand the impact of opting out and what benefits they will be giving up.

    The employer needs to provide more information on the form to confirm whether
    they have staged and whether a refund has been paid within a month of being automatically enrolled.

    Please note: It is important that the information the employer is asked to give on the form is accurate for records management purposes and so that the employer and MyCSP can make an accurate assessment of further actions required.
  5. The opting out process is explained and illustrated in a new Annex (5D) of the Employers’ Pension Guide. The parts of the process that have changed essentially are that:

    - employers must now receive and date stamp the opting out forms and take initial action and retain the original document.

    - opting out forms completed and sent via email by the employee to the employer are acceptable, providing the employer has given a written statement to MyCSP confirming they are satisfied that the electronic signature is secure and meets their compliance requirements.

    - employers should contact their Client Relationship Manager (CRM) to ensure that operational readiness checks with MyCSP are complete and to notify their CRM if their staging date changes.

    - if the employer has staged for automatic enrolment they can give automatic refunds to employees who have been automatically enrolled and who opt out within one month of being automatically enrolled or within one month of the date the employer issues them a letter about the automatic enrolment (whichever is
    latest).

    Where an employee opts out after the first month of automatic enrolment, the employer’s MyCSP Pension Service Centre has responsibility for assessing further action to be taken and options available. Depending on the circumstances and choices
    made by the employee or the length of time in the scheme, these options can include a refund, a transfer, or a preserved pension award.

    For ease of reference, two separate processes are set out and illustrated in Annex 5D - departments that have not yet staged for automatic enrolment should follow process A and departments that have staged for automatic enrolment should follow process B.
  6. Sections 4 and 5 of the Employers’ Pension Guide have been updated to incorporate information and guidance on automatic enrolment where needed.

Reference

EPN323, EPN343

Contacts

Enquiries regarding content please refer to Scheme Management Executive SMEemployers@cabinet-office.x.gsi.gov.uk